UNDERSTANDING YOUR TARGET MARKET
Whether you are a start-up, a small/medium sized company, a conglomerate or just a “one man show” it is equally important to know who you want to buy what you offer, in other words who is your “target market”. Think on this for a moment, how accurate would you be in hitting the centre target of a dart board wearing a blindfold? I am sure you would agree you would be far more effective with your eyes open and focused on your target. That simple analogy proves the idea that failure to focus your strategy towards your intended customer will yield poor results of limited sales and guaranteed losses.
The importance of knowing and understanding your target market should not be underestimated nor can it be done by standing at the door of your business and counting the people who enter and leave. What is required is structured market research and analysis to match your product and identify your customer. It was good old Peter Drucker who said “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
“Who is your target market?” Your target market is that base group for which your product was created. Unfortunately this does not mean everyone who makes a purchase belongs to this base group some of these customers are either just passing through or filling the gap.
Your target market can be quite broad. For instance if you own a business that sells children clothing you are targeting people with children, this can be narrowed further based on the product itself. If the clothing is organic or recyclable you are now targeting people with children who are environmentally friendly. Once you find yourself at this level, you are on the right track to hitting your target. Write down the following, what are the features of your product/service? What are the benefits of these features? How do those benefits help the end user? You should now have a clear idea of HOW you are serving. Now, it’s time to identify “Who.” A good place to start is with a SWOT (strengths, weaknesses, opportunities, threats) analysis. Things to consider: Who are your current customers? Why do they come? What can you do better to keep them? What other customers could you attract? Also don’t ignore the competition. You need to know: Who your competitors are? What are they offering? Are there any gaps in the market? What can you do better? (Different) and what are your advantages
There is a direct link between your target customer and their spending power this means your product/service price is an important factor. Selling a product for children to a “single parent” that is high priced can be a misfit unless there is a necessity. Similarly, selling something low cost to a wealthy group maybe a challenge as it can be perceived to be low quality. You can combat this problem by personifying your target market. You can do this by listing name, age, sex, marital status, profession, average income, likes & dislikes (i.e. favourite holiday destination, movie, song, food). Just at this point you may be asking “why am I doing this, who cares what customers eat, I just want their money”.
Orvel Ray Wilson on Why Customers Buy says “Customers buy for their reasons, not yours.” You are assessing your customer to understand their needs and create appropriate marketing strategies to capture your target market. This will save you time, money and help you avoid targeting to the wrong people. Now you’ve done all this work and it’s time to be brutally honest. Ask yourself; Are there enough people who need your product/service that fit into your target market? Will they benefit and see value in it? Do you understand what drives their purchasing decisions? Can they afford your product/service? Is your marketing message tailored to this specific group? If you’ve answered yes to these questions after doing your analysis, go ahead and give the stamp of approval that says “you are my target” and then tailor your marketing/sales approach to your target for future growth and development of your business.
Targeting a specific market does not mean that you will exclude customers that do not fit, however, strategically selecting your target market allows you to focus your marketing budget, and brand communication towards an exact market that is more likely to buy your product/service. This is a cost effective, realistic, and efficient way to reach customers, generate profits and grow your business. Don’t hit and miss, identify and focus to be successful.